RVLV’s Hot IPO Pullback Setup

RVLV was a hot IPO last Friday, running from 25 to 45.

On Tuesday on the Hit & Run private twitter feed, we took a long swing position as RVLV tested the prior breakout pivot.

We were filled at 32.30. The stock is now around 36.

The long was initiated with the idea that a 1^st hour low was on the table at a logical buy-point — the prior breakout pivot.

However, an Opening Range Break (down ORB) played out when RVLV slipped below its morning low.

Importantly, when RVLV recaptured the Opening Range Break, it triggered an ORB Reversal.

In other words, when it Jack-Knifed back up through the morning low it was in a strong position to trigger an upside breakout.

Late Day Breakouts generally persist into the bell.

When RVLV cleared the 32.50 pivot, it ripped to 35, the mid-point of its entire 25 to 45 range.

A pullback toward the 32.50-33 region sets up as another potential buy point.

Clearing 35 and sustaining puts RVLV in a position to extend.

Conclusion. Once the hot money in an IPO is washed out, buyers on the ‘back-draft’ often show up

RVLV hit that technical buy point on Tuesday and exhibited superior relative strength late in the day while many marquee speculative growth glamours were under pressure.

Consequently, we remain long the second half of our position in keeping with our  swing method of Trimming & Trailing — trimming half the position to book a profit and trailing a protective stop on the balance.

Then we see how much more the market gives us.

Position in RVLV

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